Greene King looks to grow as profits jump

Greene King, the Suffolk-based pub owner and brewer, will expand its managed
pub estate faster than planned after outperforming rivals to report a
near-doubling in first-half profit.

By Amy Wilson

6:00AM BST 02 Jul 2010

The company aims to have 1,100 managed pubs in the next three to five years, up from 888 now. About 50 of those will be moved across from Greene King's tenented pub estate, and the remaining 150 will be acquired. The company has about 2,500 pubs including sites run by tenants.

Greene King

Greene King has borrowing facilities of £400m to pay for the expansion, and has so far spent about half of the £207.5m it raised in a rights issue last year. That fundraising was an "opportunistic" move to give Greene King the money to buy sites from debt-laden rivals, according to Rooney Anand, chief executive.

The brewer of Old Speckled Hen and Belhaven ale reported pretax profit of £101.9m for the year to May 2, up from £54.3m last year. Revenue climbed 3.1pc to £984.1m. Like-for-like sales at managed pubs, including the Hungry Horse and Old English Inns chains, rose 3.5pc in the year, with food sales up 8.8pc.

In the first eight weeks of the new year, like-for-like sales rose 6pc, while in the leased estate, earnings per pub were flat on last year.

Greene King will pay a final dividend of 15.6p on Sept 13, taking the total payout for the year to 21.5p, a 2.4pc rise on last year. The company is "the only mainstream pub stock that has not only not cut its dividend but is also growing it," analysts at Deutsche Bank said.